HB 2438 Property Tax Exemption Program for Certain Income Brackets

06/17/2021
HB 2438
VOTE:NO
Passed, awaiting Gov's signature

Status (overview) of bill:https://olis.oregonlegislature.gov/liz/2021R1/Measures/Overview/HB2438
Committee assigned to bill:N/A


This bill authorizes counties with populations of less than 15,000 to adopt property tax exemption for newly constructed single-family dwellings built and occupied as primary residences by individuals with annual taxable income of not more than $75,000 if filing separately or not more than $150,000 if filing jointly. Requires adoption of ordinance by governing body of county. Applies to county with population of less than 15,000. Establishes program ordinance minimum requirements. Establishes cap of five dwelling per county per tax year.

Personal Choice and Responsibility
This is a lottery scheme for middle income potential homeowners. The application of public policy isn’t equitable.

Fiscal Responsibility
Given the population limit, there are eight counties that could potentially adopt a resolution allowed by this measure. For context, the average real market value of residential homes in those counties is approximately $200,000 and the maximum number of new properties allowed each year under this property tax exemption would be five. This is not an affordable housing project.

Limited Government
The introduced version of this measure requested a study into property tax structures. The engrossed version creates a property tax exemption in Oregon counties with populations less than 15,000. Generally, in Oregon, property tax is governed by the constitution according to Measure 5 and Measure 50 restrictions. All types of property located within the same code area, formed by taxing districts, are subject to the same tax rate. The taxable assessed value for the property determines the tax base for the property. Special assessments and property tax exemptions affect the tax imposed on the property owner. Establishes permissive property tax exemption program for workforce housing. Requires adoption of ordinance by governing body of county. Applies to county with population of less than 15,000. Establishes program ordinance minimum requirements. Establishes cap of five on allowable new participants. Applies to homeowner with incomes less than $75,000 for single filers or $150,000 for joint filers. This isn’t an affordable housing project that makes sense.

Local Control
Allows rural county to adopt an ordinance or resolution granting a property tax exemption for new housing to middle to low income and limits the exemption to five dwellings in a year, exempt from 3 to 5 years with annual recertification. Workforce housing exemption must be approved before construction but is not guaranteed. Application fees may make up for a portion of lost income. As counties approve exemptions, it reduces their already deficient budget in rural counties. Rural counties need income producers.

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